RBI New Guidelines: Strict action will be taken for loans Repayment

If you borrow money from the bank and are now trying to escape the repayment of the same, read this news. You aware of such a situation wherein you have availed a bank loan and you have been labeled a defaulter? Allow us to inform you that the Reserve Bank of India popularly known as RBI has devised a strategy for those who have defaulted on loans. For this also, the RBI (Willful Defaulter) has issued circulars to all the banks and NBFCs.

RBI makes it crystal clear that in case of investigation, if any one is found to have the status of a willful defaulter, necessary actions will be taken against such individual. Statements have been made by RBI on several occasions referring to the willful defaulters and instructions have been issued in this respect to the banks, this time RBI has turned and announced that it is going to punish all the willful defaulters.

As per RBI, supposing someone is intentionally refusing to service the debt and his loan goes to 25 lakhs and higher. The Reserve Bank of India has asked the banks and the non banking financial companies to find out the instances of ‘wilful default’ in relation to all the non- performing assets accounts of more than 25 lakh (RBI Guideline) outstanding. This directive of the RBI will now rip off these small borrowers who will not repay back the loan on purpose.

Who falls under the category of willful defaulter?

Banks will empirically follow a defined process and determine a person as a willful defaulter. In this case a Willful Default Investigation committee will consider finding evidence of such willful default. Willful defaulter is such a person who has taken loan or given a guarantee but has in a premeditated way, avoided repayment of the loan and the sum is over Rs 25 lakh.

This is how it will be differentiated

The Reserve Bank of India (RBI) has framed new conditions to prevent such persons. Under this policy, the banks in question will identify a closer person to them through a process referred to as the (wilful defaulters definition) and categorize him or her as termed ‘wilful defaulter’. As per the order, the identification committee will examine whether there was any evidence of wilful default.

Within six months, appropriate measures will be taken

As stated by the Reserve Bank of India (RBI), once any wilful default is established within the internal preliminarily investigation, the lenders shall carry out the process of identifying the borrower as a wilful (RBI master direction) defaulter within six months from the time the account is declared as NPA. The RBI direction also outlines that the lenders’ boards lay down a policy in this regard that does not discrimination.

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